Market Commentary: Geopolitical Tensions & Fed Uncertainty – Market Landscape Remains Volatile

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Global markets are reeling after Ukraine fired a British-made cruise missile at a military target in Russia for the first time, marking a new phase in the long-running conflict.

This action increases the concern for regional stability as well as its implications for global risk sentiment.

From an economic point of view, the US post-election landscape is beginning to take shape with significant changes in the macroeconomic environment.

The President of the Federal Reserve Bank (Fed) of Boston, Susan Collins, voiced the need for further interest rate reductions, but warned that the move should not be taken too hastily or too slowly.

His views reflect the Fed's efforts to find a balance between supporting the economy and managing inflation risks.

Market expectations of an interest rate cut in December remain low, with swap prices indicating a less than 50% chance of further easing this year.

Traders remain cautious, awaiting clearer guidance from Fed statements and upcoming economic data.

In the meantime, attention is focused on the appointment of President-elect Donald Trump, especially the candidate for Secretary of the Treasury.

Among the names mentioned are former Federal Reserve Governor Kevin Warsh and Apollo Global Management CEO Marc Rowan.

The election has the potential to signal the new administration's stance on fiscal and economic policy, adding a layer of intrigue to markets facing a complex landscape.

As traders assess the interplay between geopolitical tensions, the evolution of monetary policy, and fiscal leadership in the US, volatility is expected to continue across the board towards the end of the year.

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